So you made determination after consulting the Law Department that it could be final, that it is final and so it should be considered final?
I mean, we could go back through -- we have a copy of the record right now, 489 2/25/03 - FY '04 OPERATING BUDGET but in your testimony, probably about minutes ago, you referred to it as a draft again.
Of this year. Of this month. The Committee on Community Development -- and we sent letters out over a month ago to the Administration Officials. In essence, the resolution -- there are two resolutions, one by Councilman Goode on some aspects of training and employment that needs to take place. But the crux of the resolution that this Council has and Councilman Nutter's chairing is about the disparity report. The hearings are based on information that we got and we want to be able to perceive, to substantiate, enlarge, flesh out in the 490 2/25/03 - FY '04 OPERATING BUDGET disparity report. I sent letters out over a month ago. I get a letter yesterday from Ms. Davis, a two-sentence letter, "Unfortunately, I'll be unable to testify at the hearing on Thursday, February 27th due to a prior commitment. If I can assist in some other way, please let me know." The thing is that it would have been nice to know, Ms. Davis, a few weeks ago, because without the Administration's top leadership, it makes no 12 sense having a hearing. And the letter went out to your office and everybody else in the Administration way back. People understood that this thing was happening. And to receive a letter about an issue that is obviously of importance to this Council in this budget over the years and on the aspect of contracting and minority participation in this City, and then to receive a letter dated February 24th, a couple days before the hearing, that you're not going to attend, to me, is baffling.
I have to Chair the Pension Committee on that day. Mr. Roundtree and the Procurement Commissioner have been asked to provide 491 2/25/03 - FY '04 OPERATING BUDGET testimony and are preparing it.
Ms. Davis, you knew about this for a very long time. I know the Pension Committee, but I think this Council needs your presence at these hearings as we go because we want the policymaker, top policymaker next to the Mayor, to be here to answer and direct. With all due respect to Mr. Roundtree and the Procurement Commissioner, they're not at that level.
I felt because they were the subject matter experts that you'd be better served by them.
The subject matter expert is fine. But when we are looking to change policy and institute and draft legislation of this nature, when we request the policymaker within the Administration, not the implementors, because what we need to be talking about is public policy and what needs to be done and how we get it into an ordinance and legislation. I'm sorry. That is not good enough. And to do it just two days before the hearing is even worse. Because our staff has spent an inordinate amount of time seeking information, preparing for 492 2/25/03 - FY '04 OPERATING BUDGET this hearing, and it's really, really insulting to them and to us to be told in a two-page letter that, sorry, you know, can't be there. And with all due respect, the policy board you can meet, you can reschedule. With us we have to get together eight, seven people at a time when we're also preparing for budget hearings and all the wherewithal. You've got to understand when we have hearings and we request the top public policy individuals and administrators, we expect the top public policy individuals and administrators to be at those hearings. Thank you, Madam Chair.
You are welcome. Councilman Nutter, did you want to be recognized?
Yes, Madam President. Thank you. Let me make one more formal request, that if Mr. Roundtree or Ms. davis could have delivered over to us today, to the Council President, 17 copies of the disparity report, the full report, today. And if they can be brought to the President's office, I'm sure that we will all receive them. Is that 493 2/25/03 - FY '04 OPERATING BUDGET possible?
Secretary Davis, you made reference earlier to minority and female businesses. You talked about some of the outreach that's done, and I think you talked about some seminars and education and those kinds of issues. Do you find that those types of efforts need to be made for non-minority businesses?
We make those offers available to all small businesses and all disadvantaged businesses, whether they're minority or not. Any small business.
I haven't looked at the stats of who's accessing that service. At one point we had 41 firms to access the service. I believe the majority of them would have been women or minority, but not all of them.
Why do you think it is that some of those firms seem to have so much difficulty accessing the system, participating in the system and ultimately being successful in doing 494 2/25/03 - FY '04 OPERATING BUDGET business with the City? Why is that?
I think it isn't just in doing business with the City. I think it is doing business in general in this economy across the country.
Were the numbers better during the greatest -- as often was the story in the '90s -- during the greatest economic expansion in the history of the country during the Clinton years? I mean, were things better?
Things were better for minorities and women before Crosen. Once Crosen came into being, then things were dealt with very differently. So during that tremendous economic expansion there would have been some trickle down, but it was not what you would have expected in percentages nearing anything what was happening in the greater economy. And that's because minorities and women have traditionally been denied access to those things --
So it's not just about the economics. It's about opportunity. It's about the will to do things in a certain way.
It's about opportunity and the will to do, yes. 495 2/25/03 - FY '04 OPERATING BUDGET
And it's not just a government issue. It is the issue that the general economy does not provide that access, and so government is sort of viewed as the place of last resort.
Most governments aren't. Unfortunately -- or maybe fortunately -- there are impediments because there are bid laws that prevent people from just giving business. It has to be on a competitive basis. And without having something in place that allows you to do preferences --
Well, just for the record, I'm not advocating that we give the business away. You've got to perform. The way I deal with it is, if you're selling copiers and you tell me that the copier makes 60 copies a minute, then when you're making a sale, it should do 61. But the question is, did you have the opportunity to make the sale?
And we, through all of our programs, attempt to give access and level the 496 2/25/03 - FY '04 OPERATING BUDGET playing field. Leveling the playing field does not necessarily mean if someone is getting a different price from a supplier, that we can impact that. We can attempt to do what we can on our side of it, but we can't eliminate those environmental kind of things that might cause a minority or a woman or small business to prepare a higher bid. Their costs are higher very often.
On that particular point, do you think a bid preference program or legislative opportunity would be helpful? This is businesses across the board who are Philadelphia based is what the present legislation would provide, without any distinction between male, female, black white, tall, short, whatever.
That's a double-edged sword. And very often what we might find is that other municipalities implement a preference in their jurisdiction that would then be counter ours, so that our people may not get opportunities in other areas.
I hear what you're saying, but do think our folks are doing better in the counties as opposed to here? 497 2/25/03 - FY '04 OPERATING BUDGET
I understand. Well, I look at it, in terms of my perspective, it's not anti-anyone. It's pro the City and it's pro businesses here. If you want to have that opportunity, open an office and operation here and you can compete with everybody would else.
I think it's a wonderful opportunity for small businesses in the City. I just think we have to be cautious and careful because we could trigger a backlash.
I understand. I have two questions related to DROP and then I have some budget questions. You made a statement earlier. I took it down. Hopefully, I got it correct. Your experience was that there were longer tenured employees in Philadelphia City Government as compared to other governments?
What's the average tenure of a Philadelphia employee compared to other governments? 498 2/25/03 - FY '04 OPERATING BUDGET
I don't know exact average. But this is the first job I've had where I'm actually not the oldest person in the department. In every other occasion, I have very rarely had people with tenure of more than, say, years, because 7 government is not the end. 8
Ms. Davis, it's just a 9 recognition that you've continued to have a stellar 10 career and you've moved at a much younger age as compared to everyone else. You're a star. What do you expect?
Can you get information for us in terms of the people who are in the DROP; the number of people who are in, the ages just by grouping of the employees when they entered the DROP Program and their years of service? Now, I do want to -- you know, if you have enough time up here, you can find just about anything. So what I'd like to share with you, at least for the record, is the testimony from the DROP hearings.
Oh, absolutely. I'll 499 2/25/03 - FY '04 OPERATING BUDGET send it to you this afternoon. Tuesday, June 8, 1999, your predecessor was here testifying. That would have been Mr. Ben Hayllar. And it starts on , continues into . This is his testimony: "We are here to testify in favor of Bill 8 990288. This Bill would create a new option for our employees contemplating retirement." It was the purpose of the DROP plan.
That was my recollection. Essentially the DROP Program means Deferred Retirement Option Plan. It allows employees the option of accumulating lump sum pension payment that is awarded to him at the time they take their requirement or take their pension. And he goes on for a while. "There are certain disadvantages to this plan that we recognize. One, once an employee has declared, they must retire after the period. Secondly, the lump sum payment is taxable unless rolled over into an IRA. However, because DROP 500 2/25/03 - FY '04 OPERATING BUDGET plans are somewhat new in the pension business, as a precaution, we have set up this program as a three year test period. If after three years the Pension Board and its actuary find that the DROP pilot program has, in fact, cost the pension a substantial amount of money, it will retire the plan leaving those who are still in the plan to complete the program, but not allowing new employees to enter." I'll read you one last thing, which I think is interesting. Mr. Hayllar said, "This plan has been carefully designed so that it will not incur any additional costs to the fund." That was the previous sentence. That then led into, however, because DROP plans are somewhat new in the pension business, they've set up the three year piece. And, lastly, , Mr. Hayllar, "The biggest problem is that the existence of the DROP Program changed the average age of retirement of our employees. Right now, on average, our employees retire at age 61. If that age is substantially reduced, the Pension Fund will be making additional years' payments, therefore, costing it money. We believe that in the end, with the DROP Program, 501 2/25/03 - FY '04 OPERATING BUDGET that basically the 61-year average retirement age will be withheld, but that's our fundamental concern. It could alter the retirement pattern. We don't think so, but we want to be cautious about this." This is in a Q and A between --
That is, in fact, what did happen. People are retiring before that.
That was in a Q and A between Mr. Hayllar and Council President Verna. But you'll get us the additional DROP information, right?
Thank you. There were a couple of those little situations where things were promoted one way and turned out another. Can you tell me why on of the budget book, I'm seeing here a contract for $1.2 million for writ service for municipal courts. Why are we paying that?
Let's talk about on 2/25/03 - FY '04 OPERATING BUDGET 820, contract with the Redevelopment Authority, $150,000 to Housing with Dignity Admin. Costs?
That was asked before and we said we were going to get you a response.
Okay. Sorry about that. And then on , there's a bunch of folks who are in the FY '02 actual obligations that don't show up in '03 or '04, one of which I'm certainly particularly concerned about. But if you have in line items number 505, Fund for Philadelphia, $89,000, Freedom Theater, Mann Music Center, Cultural Fund, Sports Complex, Special Services district. Are these being funded somewhere else in '04, or are they, in fact, not being funded at all? Did they just end in some other parts of the budget?
For some of them, they wound up elsewhere in the budget. For some, they were one-time things that don't repeat.
For instance, the Special Services District is part of the stadium deal. There was an agreement for a one-time payment. So that's what's reflected here. 503 2/25/03 - FY '04 OPERATING BUDGET
Well, it's not my area and I think it's covered by the President. But just to be nosy, the one time payment of the million dollars, is that supposed to cover a certain number of years, or is that funding being supplemented by private parties?
After the first year. Mann Music Center, I thought there was somewhat of a multi-year agreement.
Yeah. That will wind up getting funded somewhere in the budget each year. It might not necessarily be here. It might wind up being in one of the departments, but it will be funded.
Okay. As you know, I'm particularly concerned about that.
If you could let me know where else it's going to show up, I'd like to follow that one. Lastly, I'm certainly familiar with Tentella (ph) Associates. I didn't realize that they're 504 2/25/03 - FY '04 OPERATING BUDGET apparently under contract to us to deal with, I'm assuming, L&I, bizarre situations out in the universe?
If I may, Councilman. Tentella is on retainer to provide engineering services in relationship to property loss or property damage that is caused by a City operation. The Water Department, L&I, they're coming in, they're making the determination, as in your district, with the water. They're making a determination on the properties and assuring us the capability of either repairing them or looking at long term loss.
You're talking about from the most recent water main break?
And I believe they have also done a study regarding the sinking homes in Eastwick?
That is correct. And to the best of my knowledge, all of the issues coming with structural questions and private residents has been handled by Tentella.
I'm familiar with that. 505 2/25/03 - FY '04 OPERATING BUDGET I certainly have no issue, no argument with their work. I'd only -- this may be more on the realm of possibly a philosophical concern. I know sometimes they're brought in seemingly as an independent entity making an assessment where there are disputes between situations between citizens and the government. I'd only raise a little bit of a red flag on how do you maintain completely this sense of an independent assessment that the taxpayer is trying to figure out, you know, kind of, where do I go from here? And the people who are doing it are really under contract with us. I don't know that that's your farthest arms length transaction.
The best situation in the world is to be able to tell you that they're perfect in every respect. I can't necessarily say that's a fact.
I'm not questioning the integrity of their work. I'm just saying that, if I have to sit with a constituent and say, well, this company says that your place is X or it's not the City's fault. And they're under a universal contract to us, it might raise a little bit of 506 2/25/03 - FY '04 OPERATING BUDGET concern in the taxpayer's mind as to, am I getting the real deal or am I getting something else.
What Tentella is doing is that they're setting a dollar figure for repair work or for the amount of damage that was done. Each individual homeowner has their own home insurance, and hopefully renters have renters' insurance. The responsibility firsthand is for their insurance company to come in and make a determination, and basically Tentella is a cross reference factors.
I have no dispute. I have interacted with them on a number occasions. Last question. , Madam Secretary, the line item 250, to be selected, management information consultants; is that for Finance or is this MOIS issue?
That's with Finance. It's related to our financial systems. It's related to the financial systems.
These contracts, mostly covering pages 819, 820, we talked about 821, these 507 2/25/03 - FY '04 OPERATING BUDGET are basically professional services contracts of a no bid nature; is that correct?
And do you usually know pretty much who you want, or do you go out and solicit a few people, or you just say, hey, we want XYZ service and we're picking so and so?
We may do an RFP, RFQ, even an RFI or have experience with someone that we've used in the past. So it's a wide variety.
You're welcome. Councilman Rizzo, do you have any questions?
I have a quick question for Risk Management. I think it would be interesting just to take maybe two minutes to explain, now that this storm has passed, the roads are in terrible, terrible condition. And you just mentioned about claims against the City. What rights does a visitor or a constituent have if their vehicle is damaged? And what should they do in the effect they have some relief? And what I'm seeing more so than potholes, 508 2/25/03 - FY '04 OPERATING BUDGET I'm seeing restoration by the Water Department, by PGW, by the other utilities, that are not being done properly and causing significant damage to vehicles. So I'd like to know from Risk Management what can we tell our constituents on how to deal with these issues?
I think the first thing that has to be understood is that there's a torts claim act involved and there's some legal issues from the standpoint of law rule and regulation. And that does cause me to say that there's no right answer and there's no wrong answer. The best thing for a constituent to do is, if they feel that they've been wronged by a City action, to submit a request for claim. My people and my organization are there to find out and rule out what is fact and what is not fact. If they are entitled to something, they should be reimbursed. If not, they should not. I have to do it on a case by case basis. That is because of the torts claim. There are times in which a municipality is definitely legally responsible for, say, a stop sign not being in place. And there are other times that they're not. It depends on numerous circumstances. 509 2/25/03 - FY '04 OPERATING BUDGET
Let's create a quick situation here. I don't want to take too much time on this. A person hits a pothole. It's right on Germantown Avenue. It might be a state highway. I don't know if that changes things. It wasn't there on Monday, but today it's there. They damage the vehicle, blow out a tire, bend a wheel. Do they go to their insurance company, and then does their insurance company come after you, or does the insurance company not even waste their time, just pay the claim, if there is a claim?
In this circumstance, each individual has to have their own car insurance. Their deductible is the only thing that we're looking at, which would be, if the damage to the car is $600 and their deductible is $500, the City might have a liability at $500. But directly for a pothole, what the City's responsibility would be, have they used the amount of consideration to get the pothole filled? Were they aware of the pothole being there? Was there negligence on the part of the City for not taking care of something that they were aware of? Those would be the criteria as to whether or not the City would hold liability. 510 2/25/03 - FY '04 OPERATING BUDGET
Well, since you're new, I've been talking for years about the fact that I don't think we have good coordination with the utilities. I'll give you an example. On my way home last night, about o'clock 7 -- about two weeks ago a Water Department 8 excavation, a water leak -- last night we came home 9 and there was a hole where, in fact, the Water 10 Department never backed filled with black top. They just threw the dirt back in the hole, and whatever was broken up, back in that hole. Now, a week goes by, the rains, the mud, and everything has gone. There's a hole in the center of Chestnut Hill Avenue just west -- and I'm just using this an example -- of Bethlehem Pike that has got to be at least a foot deep. You hit that with any -- I don't care if you even have a Hummer. The Hummer is going to stop humming. That's been like that. I reported it two weeks ago to the Municipal radio. I reported it to the gas company. The dispatcher last night on radio said he was surprised that that wasn't taken care of because he personally reported it two weeks ago. My point being is that we are putting people 511 2/25/03 - FY '04 OPERATING BUDGET in situations where -- the Police Department, they don't have a barricade to go out and put on a dangerous highway condition. They have these eight foot wooden horses that don't lend to protecting the community. In this particular application it wouldn't work. Somebody's really got to take this on and figure a way that, if there is a dangerous highway condition in the County of Philadelphia and the City of Philadelphia, that we have a way of either making it safe or putting a traffic cone at that location. The dispatchers ask the Police Department to do it. The Police Department says it's not their job. It's terribly confusing. Forget the aggravation you have. But I can imagine having a nice, brand-new vehicle, and coming up Chestnut Hill Avenue last night, hitting that pothole and destroying the front end of that vehicle unnecessarily because someone in that case was negligent. There's obviously a break down in the Water Department 's system that could allow even during this inclement weather for a pothole or an excavation not to at least be fixed temporarily. Forget the permanent repair where it looks all nice and pretty. I'm talking about just 512 2/25/03 - FY '04 OPERATING BUDGET temporarily to make it safe. So I would hope that you would really review this entire process because it really upsets me when I see a poor person, their first brand-new car, sitting there in disgust because they hit a pothole. And, you know, the troubling thing is, they don't know that it's been like that for a week or two weeks, but many of us that ride by those potholes know that they've been there a long time and that poor person happened to be the victim of that particular situation.
Well, I can let the Members of the Council know and rest assured that I was brought on board with not just the background in risk management, but a large background in safety and safety management. That's prevention. That's something that I'm working now with the department heads. I've been working with Water and with Streets and with Fleet in order to come up with a means by which we identify high hazard issues and correct them. It's doable. There's no question whatsoever. It's doable.
I walk through the City and I wish I had a magic wand and I could get all these things taken care of that I see. And everyone 513 2/25/03 - FY '04 OPERATING BUDGET in this room has probably seen it. Where you have an inlet that is completely missing at a corner, especially in some of the inner-City neighborhoods, where, my God, if at night you're walking and your vision isn't good and it's dark you can fall right down one of these open inlet that's totally missing. My point being is that, if I saw that in let and called even 911 and told them about this dangerous condition, I guarantee you, I'd have to say, it's Councilman Rizzo, to get it taken care of. An average citizen would not get any response from that call. The Police Department's got a hole with this big eight foot barricade around. It's a circus the way these things are dealt with. I hope since you have a degree in safety or a background in corporate safety -- and so do I. I told you that when I talked to you on the telephone. That it is really upsetting to me to see people injured by facilities that aren't well maintained by the City of Philadelphia.
I believe that the resources are already in place. I think it's a question of communication. That's where I will address it first. 514 2/25/03 - FY '04 OPERATING BUDGET
Well, in all fairness, I do my little speech telling people that I've talked about this last year. I talked about this last year. You weren't here. You're the new guy. I talked about it the year before and the year before that. Hopefully, maybe because of you I won't talk about it next year. Thanks.
Thank you. Are there any other questions from Members of the Committee? (No response.)
Seeing none, thank you very much. At the request of the stenographer, we're going to recess for 15 minutes. (Brief recess.)
The Committee of the Whole is now back in session. We will now hear from the Revenue Department. Thank you for your patience. Please identify yourself and proceed with your testimony. 515 2/25/03 - FY '04 OPERATING BUDGET
Good afternoon, President Verna and Members of City Council. I'm Nancy Kammerdeiner, Revenue Commissioner, and I'm pleased to be with you today to discuss the proposed Fiscal Year 2004 Operating Budget for the Department of Revenue, including the Water Revenue Bureau. With me today is Marlene Duley who has recently been appointed as Deputy Revenue Commissioner for Water Revenue.
You have my written testimony, so I'll offer some highlights at this time and then we'll be happy to answer any questions that you might have at the conclusion at my testimony. The General Fund appropriation request for the Department of Revenue totals $18,177,343. 3 million is for personal services and supports 267 full-time positions. It provides for the 3 percent wage increases effective 12/15/02 and 7/1/03, increments in longevity payments due to employees and the estimated cost of lump sum payments due to employees who will be retiring under DROP. The department is requesting just over $4 516 2/25/03 - FY '04 OPERATING BUDGET million for purchase of services and $784,000 for materials, supplies, and equipment. 5 percent for the general budget reduction assigned to the Department. In the Water Fund, the Fiscal '04 appropriation request totals $25,380,382. 8 million for payment processing and outgoing mail services that support the bureau. $11,217,949 is in personal service and supports 245 positions in the Water Revenue Bureau and 44 full-time positions in payment processing and outgoing mail center. And again, this amount for personal services includes the wage increase increments in longevity payments that are due to employees. We're also requesting $12,698,633 for the purchase of services; $1,453,300 for materials, supplies and equipment; and $9,500 for meritorious awards and contributions. The increases over the Fiscal '03 estimated obligations in classes 200 and 400 will provide additional funding for collection agency contracts 517 2/25/03 - FY '04 OPERATING BUDGET for the water side of the operation, support the implementation of a new customer service information system, and provide hardware and communications required for this software application. The new system, utilizing relational database technology, will provide a modern platform for customer collection and billing and is also expected to enhance customer service delivery by automating processes that are now paper based and manual. I'd like to touch on just a few of the Department's efforts to maximize the collection of revenue and improve services to taxpayers. Using federal tax data from the Internal Revenue Service, we've developed a variety of discovery programs to identify new taxpayers who are liable for school income tax, business privilege tax, net profits tax, and wage tax. These programs increase current revenue in Fiscal 2002. It was about $6 million that they brought in, and they have a long-term positive impact on revenue. Building on the relationships that we developed when the department supported the Commonwealth's homeowners rebate program, revenues initiating a cooperative compliance and discovery 518 2/25/03 - FY '04 OPERATING BUDGET program with the Pennsylvania Department of Revenue. This initiative, coupled with an E-Government initiative that will provide a link between the Commonwealth of Pennsylvania's on-line business registration program and the City's on-line business registration will lead to the early identification of those doing business in Philadelphia that are not paying business taxes in Philadelphia. Also as a result of this relationship with the State, senior citizens from Philadelphia can now apply for the state real estate tax rebate without a paper real estate tax receipt. We are providing a data file that the State can use to confirm taxpayer eligibility. This is a win/win/win. It makes it easier for the taxpayer to file for the rebate, expedites the State's review of the application, and saves the City from printing and mailing thousands of receipts. The Water Revenue Bureau has continued to focus on collection efforts to pursue delinquent customers and to better manage accounts receivable balances. This is often measured with the current collections rate, customers that pay within 30 to 120 days. 8 percent in Fiscal '03.
Similarly, we look at the decline or the rise, if that would be the case, in accounts receivable balances. 6 million in Fiscal '02. That's a percent decrease and is the result of 10 the effective use of collection agencies and Law 11 Department enforcement action. 12 As I mentioned before, the Water Revenue 13 Bureau is now preparing for the implementation of a 14 new customer information system. It's anticipated 15 that the initial phase of this system will be in 16 place by the end of calendar 2003 with 3 additional 17 phases in place within six months thereafter. 18 Before I conclude, I would just like to 19 mention a couple of our E-Government applications 20 that are being implemented. 21 Tax forms are now downloadable from the Departments's website and most can be completed on-line with edits before being printed male in. New businesses can now apply for a tax account and a business privilege license with a 520 2/25/03 - FY '04 OPERATING BUDGET single application on-line. Earlier this month, we also introduced the electronic filing of wage tax reconciliation and school income tax returns. During fiscal '04, additional tax returns will be made available for full electronic filing. Tax regulations and other tax information are available for reference on-line, thus giving tax practitioners and individual taxpayers an opportunity to obtain detailed tax information easily. We continue to work to enhance and increase the things we offer on-line and would welcome your feedback on this. This concludes my formal testimony. And as I mentioned before, we're now available to answer any questions you may have.
Thank you. One of the initiatives included in the budget is the formation of the 311 call center. How will your department be impacted by this initiative?
We know that the original plan or initial plan calls for 11 of our staff to be included in the 311 call center, and the budget that's before you shows a decrease in 11 positions 521 2/25/03 - FY '04 OPERATING BUDGET and the related staff costs. We're just at the beginning of the process of getting involve in, in working out the arrangements on that, and so are not in a position to tell you exactly how that will impact us. We do expect that a lot of the initial calls that we get in terms of what are tax due dates, I haven't gotten my bill yet, that kind of call will be handled by the 311 call center. We would expect --
Are there any other types of calls that will be handled by that center?
Since we're just in the early formulative stages of the process for that, I really can't tell you what calls will go to 311 and which calls will remain with the department, other than to say that a complex call dealing with the resolution of details on a taxpayer's account would still need to be resolved by someone who has information on the details of the tax law.
The 311 call center will be used to handle those calls that can be easily scripted so that there is a very definite yes, no, where you have frequently asked questions those are the type that will stay with 311. Any that require more 522 2/25/03 - FY '04 OPERATING BUDGET detail will be routed by that 311 operator to someone within a department or within a specialized call center who is equipped to handle those types of questions.
Do we have an indication when this would be implemented and how many staff would be required?
It will be implemented during FY '04. The first phase of it should be in place by probably August. In terms of the staffing pattern, we have a report on that and we'll send that to you so you can see the exact numbers.
I would just like to clear this in my mind. I remember years ago we had another number. Councilman Rizzo, I think I had mentioned it to you. Was it 231-3131?
It was supposed to be non-emergency. 523 2/25/03 - FY '04 OPERATING BUDGET
All non-emergency calls should come in through that number, yes.
Again, I believe the questions were asked when you folks were in here a week or so ago. I don't really know what you're trying to accomplish here. 311 is a very expensive undertaking. The fixed charges to a establish a 311 system, I don't get it. Most people who are home can call a 7-digit phone number, they have unlimited dialing in the local calling area. What are you trying to accomplish, so they don't have to dial the extra digits? What I would like you to do -- most people at home have dialers now on their telephones. If you want to make it easier for them, just tell them to program 3 into their dialer and call 686-1776. I think you'd be saving this Administration a lot of money in eliminating the Verizon charges each month 524 2/25/03 - FY '04 OPERATING BUDGET for the maintenance and the engineering and -- you're duplicated basically the 911 system, which we all know is a very, very expensive infrastructure to manage. I'm not going to be supportive and I'll be a critic of this Administration until I hear how much we're going to pay up front, what the monthly charges are. From what I understand from some telecommunication executives, this a very, very expensive undertaking and maybe an unnecessary undertaking. I don't know what the requirement is to have people call 311. We've had 686-1776 for a lot of years, and that number can still go to the same call center without all the overhead and expenses of a 311 system. I just don't get what this is all about.
The primary objective of this initiative is to consolidate our disparate centers so that now, for example, people would call the Streets Department with a question or L&I and not get satisfactory answers. We want to have one central location people can call for that kind of information where people will be satisfactorily trained so that you can call in and actually get information. 525 2/25/03 - FY '04 OPERATING BUDGET
Mr. Dubow, I'm not questioning that concept. The concept is fine. It's what you're trying to do to accomplish that goal, to establish a 311 system. A 7-digit phone number with an area code of 215 for millions of dollars less can go to the same -- when you call a public utility company, you don't call 311 or 611 or 411. You don't need a 311 number to move to accomplish what your goal is. The existing 1776 number can accomplish that, and that number can be routed to any call center that you develop. As a mater of fact, people with Water Department expertise, when the recording comes on, push 3 for water, goes to a representative that has expertise in a particular discipline. But spending -- and I don't even know how much, but I can bet -- and those numbers that you threw out before were a low ball on the set-up cost for a 311 system and then the monthly Verizon charges that are associated with maintaining that system.
I thought we said we were going 526 2/25/03 - FY '04 OPERATING BUDGET to get back to you.
No, you threw out a number. As a matter of fact, it was even in the testimony, a million-something. You even told me that you had an initial estimate on that.
I told you we were going to supply you that information, which we're still going to do.
It amazes me that you're talking about setting up the system you don't even know what it's going to cost.
What I told is we have a report that I would get you. That report lays out the cost.
Well, you're telling us it's going to be implemented in August. It sounds to me as though you're saying, "We're going to do this because it's sexy and it sounds good no matter what it costs.
No, why we're doing it is because it will be an improvement in service and because the report that we have which we'll show you, shows that there are savings that can be generated.
I can't imagine any 527 2/25/03 - FY '04 OPERATING BUDGET savings being generated on spending a big, big installation cost and a monthly charge to maintain a 311 system where you can accomplish all the things that you want to accomplish with a plain old phone number.
I would like to indicate that the Five-Year Plan states that the start-up costs are estimated to be $540,000 and an annual operating cost for a 24-hour contact center with 40 agents are estimated to be $1.4 million. The plan assumes a total savings of $4.7 million through FY '08.
I'm not questioning your 24-hour call center. I'm not questioning any of those good things. I'm questioning one item in the whole scenario of how our residents communicate to 528 2/25/03 - FY '04 OPERATING BUDGET City Government. Certainly a 311 number will lessen the number of digits to be dialed. But if you back the 311 number out of this entire scenario, let me know what the cost will be without the 311 factored in and using the existing lines that we already have to support this facility. That's what I want to know.
Thank you. Ms. Kammerdeiner, what services does Mara Management (ph) provide for 1.1 million? It's on -43 of the detail. And can you tell us why these services could not be provided in-house?
Mara Management provides support for our existing Revenue computer system and for the development of enhancements to that system. About half of that $1.1 million is for the development and conversion of our stand-alone real estate tax system from being a stand-alone system to the integrated taxpayer information processing systems known as TIPS. They provide analytical and programming support to supplement the support we get from the Mayor's Office of Information Services. 529 2/25/03 - FY '04 OPERATING BUDGET
On -53 of the detail, you are requesting $390,000 for a collection agency consultant to be determined. What is the purpose of this request?
This anticipates having an additional collection agency established for the Water Revenue area for collection of water and sewer fees.
Right now we have three. And this was drawn up with an expectation that we would be adding a fourth to that. I don't know that there's anything else that we could add to that specifically.
Is that just Water or is it Water and Revenue? How about the real estate?
This is in the Water Fund and this is for water collections. And I hasten to add that with any of these collection agency contracts, we don't spend the money unless they actually collect. They are paid on a percentage of the collection. 530 2/25/03 - FY '04 OPERATING BUDGET
There are different rates for each of the contracts. I can get those rates for you. But they're in the vicinity of percent. 7 But I will get the specific information for you on 8 each one of them. 9 These were selected as a result of an RFP 10 process, and the collection agency contracts include 11 both tax and water and sewer collections for basic 12 collections in addition in the Water Fund you have 13 collections for a program called the Utility 14 Services Tenants Rights Act, USTRA, and they are 15 there are separate activities for collection under 16 that Act because of the additional services that 17 need to be provided to tenants when their landlord 18 fails to pay for the water. 19
I don't have that exact number with me. I will get it. We generally collect about 89 percent to 90 percent of the year's amount in the tax year.
In the current 531 2/25/03 - FY '04 OPERATING BUDGET year?
In the current year. And then in the next several years three, four, five years, we bring that number up to 95 to 96 percent of the amount that was billed. But to tell you the cumulative amount, I will have to get an update on that.
So would you say that our collection rate is much better than it has been in the last several years?
I don't whether I would use the word "much," but it is improved. I think we are coming up very slightly in those percentages but not by a dramatic amount.
On -53 of the detail, you're asking for $5.3 million for a CIS Project. Please enlighten me. What is a CIS Project and what is the funding for?
I reference that in my testimony. That's the Customer Information System for water billing and collection. And it will basically replace a 25-year-old billing system that's currently being used for producing water bills, a system that is an outdated language, very 532 2/25/03 - FY '04 OPERATING BUDGET inflexible, creates lots of problems in terms of changes, and has been in need of replacement. This will be a modern relational database. We're working with MOIS and with the Office of Director of the Finance in determining the full parameters of that system and the selection is being made in conjunction with them for two reasons: One, because that's where we get our guidance on technology; secondly, because this will need to fit into an enterprise wide system that will be coming later on. But right now we're concentrating on the customer information and billing and collection activities for the Water and Sewer Fund.
Thank you. The Chair recognizes Councilman Goode.
A few quick areas of questioning regarding the CDC Tax Credit Program and the Job Creation Tax Credit Program and the Discovery Projects. First, in terms of the CDC Tax Credit Program, how many agreements have been signed to 533 2/25/03 - FY '04 OPERATING BUDGET date?
I believe it's that 4 have been signed and two are with the business 5 partners for their signature, as we speak. 6
It's Beach and -- they 9 were the last two that came in. I will verify and 10 tell you exactly. 11
That sounds like the right 13 two, but I will reconfirm that.
Thank you. Did you issue an annual report related to the CDC Tax Credit Program? According to the legislation, it was supposed to be a review of experience of the program over the year issued by December 31st.
I have to say I failed to do that. And I thought that this was in the start-up period. I thought that that would begin after the first full year of operation. I apologize if you were expecting a report during this start-up period, but I was expecting to file the first report 534 2/25/03 - FY '04 OPERATING BUDGET next year.
Actually, can we have a report for last year just dealing with the whole selection process? I think it would be helpful.
Not a problem. I misread what was anticipated there and expected to do the first report after the first full year of operation.
Okay, thank you. Regarding the Job Creation Tax Credit Program, what's the status of it?
The regulations are on file in records as we speak. I think they went in about a week ago, and they sit for 30 days before they're official. We've referenced the Job Credit Program in our business tax forms with the instructions, and there's information on the website in reference to the job credit, but the full regulations are not yet fully official. So far as I know, there haven't been any requests for a public hearing on those. So assuming that that stays the case, they would be in effect in mid-March.
And what was the reason for a delay in creating the regulation? From what I've read, they basically were based upon the bill 535 2/25/03 - FY '04 OPERATING BUDGET and the regulations can basically be found within the bill.
Okay. Regarding your discovery projects, identifying new taxpayers through federal and state data, my understanding that people who know they're earning money and don't pay taxes on it, people who run businesses and know that they are earning profit; but for something like the school income tax, do you think that there is enough notification that tax exists in terms of stock dividends and unearned income out there or are we actually catching people with something they actually don't know they're guilty of?
We get a lot of complaints from people who feel that they didn't know about the tax. We've tried with our literature, we take out ads in community papers each year. We took out ads he earlier this month. I believe they were all published in the week of February 5th in probably a dozen newspapers; our Plain Talk Tax Guide, which is available to individual taxpayers. And certainly, 536 2/25/03 - FY '04 OPERATING BUDGET I'll make a pitch for it. If any Member of Council would like more of those for their offices, we have some available. We talk to practitioner. We try to get the word out about the tax, but it's one that people just don't seem to know about.
Based upon your marketing efforts, have you found the complaints are going down or are the complaints steady?
I really don't have a good measure on that. I know we still get complaints from people who feel that they were totally unaware a tax and say they would have paid had they known about it. I would say in terms of the number that come to me, it's somewhat lower than the number of complaints I got a year or two ago; but they're still fairly steady.
I was made aware of a specific constituent situation in Councilman's Clarke's district. One of his constituents, which is also one of my constituents since I'm at-large, a teacher who probably wouldn't mind paying the school income tax happened to have unearned income or stock dividend income, but through discovery they found that she owed for five years and she was hit at 537 2/25/03 - FY '04 OPERATING BUDGET once. And that's not particularly fair. And that compounded by real estate issues. Is there a way to address this through some more aggressive marketing? Maybe by marketing the program through real estate tax bills or sending it with a water bill. Is there some other way that you can market the fact that this is another tax you may have to pay?
I believe a few years ago we did put a flyer in with water bills, and it didn't really generate much change in terms of the number of filers. A number of years ago, the Department sent out thousands and thousands of forms and actually then we got complaints from people who said, "Why are you waisting City money sending me this form when I don't have this kind of income?" Certainly, we're open to your suggestions and ideas. We are looking constantly for new ways of getting the word out to people who might actually have this type of unearned income and so certainly would welcome your suggestions in terms of improving the marketing.
Do you keep a record of the level of complaints, how many complaints you 538 2/25/03 - FY '04 OPERATING BUDGET receive per year related to that particular tax?
Not in that manner, no. 4 Most of the ones who complain are the ones we've found in discovery and who are complaining because they've now, as you pointed out, gotten a bill for multiple years.
So is there any way to address that to be a bit more fair to them.
We're already waiving penalty and reducing the amount of interest that they pay if they cooperate in terms of a filing. And I'm not sure how much further we can go on that.
Are you suggesting that they position for that or do they have to know to petition?
We offer that to them in the first instance. And if they pay or enter into a payment agreement at the outset, we waive the penalty.
You're welcome. The Chair recognizes Councilman Nutter.